HC Deb 11 May 1993 vol 224 cc636-7
3. Mr. Batiste

To ask the Secretary of State for Education if he monitors the promptness of payments of tuition fees by local authorities to universities.

The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell)

Local education authorities have a statutory duty to pay tuition fees promptly by the dates specified in the Mandatory Awards Regulations. The Department takes action on any evidence of failure to comply.

Mr. Batiste

Is my hon. Friend aware that last year a number of local authorities were late in passing on tuition fees, which they had received from the Government, to universities and that there is some evidence that that pattern has been repeated this year? Is it not entirely wrong that higher education should be denied funds because of late payment by local authorities? Is it not time that the Government thought about the way in which money could be transferred direct to universities without going through the post box of local government?

Mr. Boswell

I agree with my hon. Friend that it is most unsatisfactory if payments are not made in time. It is not even in the interests of the local authorities, because they do not get interest on the money, which is lodged in a special account with the Paymaster General. It is sometimes a matter of administrative complication or failure. We most vigorously investigate those cases in which, under the existing award system, it is apparently impossible for them to pay on time, as they should.

Mr. Rooker

Will the Minister find out why the problem does not arise in Scotland and see whether he can apply the lessons learnt there to the situation in England? Will he accept from me that, the last time I checked, universities were owed almost £100 million after the date on which payment was due? One in five local authorities is a late payer, and some local authorities pay the fees for the second term before the fees for the first term. Any half-awake local authority treasurer who is handed, effectively, control of millions of pounds of central Government funds to pass on without any penalty for late payment will work that money for his or her employer or local authority. Is it not time that some sort of interest penalty was placed on the late payment of tuition fees and at the same time, while we are thinking about it, an interest penalty paid for the late payment of mandatory award grants to students, who suffer just as badly?

Mr. Boswell

I am interested in the hon. Gentleman's comments about Scotland, have taken note of them and am aware of the situation there. We have improved the system in England. There is no advantage to local authorities, because the money lodged to their credit by the due date does not attract interest in their hands. We watch carefully for failures to pay and will tighten that up. He also mentioned the more general issue of student grants and I am concerned about any that are not paid on time. They are, or they should be, paid early in, or at the beginning of, term and that is one reason why we leave tuition fees until the end of term, to try to avoid the two becoming confused. We pursue vigorously authorities that fail to pay. There are fewer than there were, but there are still too many.

Dame Elaine Kellett-Bowman

Is my hon. Friend aware that now that the county elections are behind us, it is rumoured that Lancashire county council is proposing to abolish the appeals procedure for students seeking discretionary grants? Is not that grossly unfair to the students and further evidence of its arrogance, which has been allowed to surface now that the elections are over?

Mr. Boswell

My hon. Friend goes wider still—the nature of discretion is that it has to be exercised. I shall take a dim view of any local authority that removes its discretion by saying that it will not consider payment in a certain case.

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